| |
LEASE:
|
BUY:
|
| Ownership: |
You
do not own the vehicle. You get to use it but must
return it at the end of the lease unless you choose
to buy it. |
You
own the vehicle and get to keep it at the end of
the financing term. |
| Up-front
costs: |
Up-front
costs may include the first month's payment, a refundable
security deposit, a capitalized cost reduction (like
a down payment), taxes, registration and other fees,
and other charges. |
Up-front
costs include the cash price or a down payment,
taxes, registration and other fees, and other charges |
| Monthly
payments: |
Monthly
lease payments are usually lower than monthly loan
payments because you are paying only for the vehicle's
depreciation during the lease term, plus rent charges
(like interest), taxes, and fees |
Monthly
loan payments are usually higher than monthly lease
payments because you are paying for the entire purchase
price of the vehicle, plus interest and other finance
charges, taxes, and fees. |
| Early
termination: |
You
are responsible for any early termination charges
if you end the lease early. |
You
are responsible for any pay-off amount if you end
the loan early. |
| Vehicle
return: |
You
may return the vehicle at lease end, pay any end-of-lease
costs, and “walk away.” |
You
may have to sell or trade the vehicle when you decide
you want a different vehicle. |
| Future
value |
The
lessor has the risk of the future market value of
the vehicle. |
You
have the risk of the vehicle's market value when
you trade or sell it |
| Mileage
/ Km |
Most
leases limit the number of Km you may drive (often
12,000-15,000 per year). You can negotiate a higher
Km limit and pay a higher monthly payment. You will
likely have to pay charges for exceeding those limits
if you return the vehicle. |
You
may drive as many Km as you want, but higher Km
will lower the vehicle's trade-in or resale value. |
| Excess
wear: |
Most
leases limit wear to the vehicle during the lease
term. You will likely have to pay extra charges
for exceeding those limits if you return the vehicle. |
There
are no limits or charges for excessive wear to the
vehicle, but excessive wear will lower the vehicle's
trade-in or resale value. |
| End
of term: |
At
the end of the lease (typically 2-4 years), you
may have a new payment either to finance the purchase
of the existing vehicle or to lease another vehicle. |
At
the end of the loan term (typically 4-6 years),
you have no further loan payments |
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